PLEASE SIGN IN!
HLS TaxHelp Training
February 2, 2008
(2007 Calendar Year Returns)
TaxHelp Board:
Jesse Gurman, Amber Greaves,
Lane Morgan
Overview
 Sign
in if you haven’t already
 Tax law
 Interviewing
 Using TaxWise
 Review and filing
 Certification
Tax Basics: Filing Status

Who has to file? Most people if > $8,750, p. 8

Status – use workbook chart & tips, pp. 12-13
– Single (has no dependents)
– Married filing jointly
– Married filing separately
– Head of household (unmarried or separated, w/deps)
– Qualifying widow(er) with dependent child

Married filing separately reduces credits – whenever
possible file married/jointly or HoH

Non-US citizens – intermediate issue
Tax Basics: Dependents

Use charts & tips, pp. 15-19

Children < 18 in HH, >50% expenses, tiebreakers

College students 19-24, >50% expenses, “primary” res

Qualifying relatives (or non-relative in HH), <$3400

Dependent as filer (“CAN” not “WILL” someone claim)

Child credits automatic in TW, except child/dep care

EIC – reqs mostly the same, but check (esp SSN)

Divorce – no EIC or HoH for noncustodial, even w/perm

Dependency and HoH not always same (student, parent)
Tax Basics: Income Types

Earned v. unearned (definition)

Wages (form W-2)
– both federal and state info, match address
– check for part-year state residency issues
– some government jobs/pensions not taxed by state

Bank interest (form 1099-INT), dividends (1099-DIV)

IRA, 401(k), other pensions (form 1099-R)
– taxes are only owed if disbursed, or Roth IRA

Social security, unemployment, worker’s comp, gambling

Self-employment – intermediate only
Tax Basics: Earned Income Credit
Primary focus of VITA/TaxHelp
 Credit targeted to low-income taxpayers
 Higher for taxpayers with dependents

– must file married/jointly or head of household
Use flow chart/checklist to ensure all
requirements met (pp. 35-38)
 EIC worksheet will pop up in Taxwise
automatically if income cutoff is met
 Cutoffs: ~$38k (>1qc), ~34k (1qc), ~13k (0qc)

Tax Basics: Tuition
Credits/Deductions

3 different ways, all non-refundable
– Hope Credit: first 2 years of undergrad, 100% credit
of up to $1650 paid
– Lifetime Learning Credit: any undergrad, grad or
vocational, 20% credit of up to $10k paid
– Straight deduction: @ tax rate, up to $4k paid
Unless you are sure, try all 3
 Make sure to follow charts carefully
 Hope and LLC form 8863, deduction 1040 p. 1

Tax Basics: Other
Deductions/Credits
 Keep
an eye out during the interview
 You can ask every question until you feel
comfortable, or by “group”
 Ones that come up the most:
– student loan interest
– IRA contribution
– Retirement Savings Credit (form 8880)
Tax Basics: State (MA)

Credits/deductions
– Rent
– Transportation
– Home heating oil

Proof of Health Insurance
– new this year
– taxpayer should receive MA 1099-HC in mail
– if no insurance, might be MA refund penalty

First time state filers can NOT e-file for MA
Intermediate-Level Issues:
Itemized Deductions
Almost everyone takes standard deduction
 Ask taxpayer if he/she has itemized before
 Biggest reasons to itemize

–
–
–
–

Mortgage
Large health care costs
Other large purchases (e.g. new car)
must be > $5,350 (s), $10,700 (m), $7,850 (HoH)
Itemized returns can only be completed by
intermediate-certified volunteers
Intermediate-Level Issues: SelfEmployment Income
 Some
taxpayers will have self-employment
income (housekeeping, babysitting, small
business, etc.)
 May have 1099-misc or no documentation
 Returns with self-employment income can
only be completed by intermediatecertified volunteers
Advanced Issues
 We
do not cover them
 They include:
– complicated investments beyond 1099-int/div
– sale of any stock, property, other capital gain
– business income beyond basic self-employ
 If
you have any doubt or questions, ask a
site expert – do not try to do it yourself
Logging into TaxWise
 Website
is https://twonline.taxwise.com,
or https://twonline.taxwise.com/training
 User = first initial + last name (all caps)
 Initial password will be the same (you will
have to change it the first time)
 Our client number is 796235
 EFIN is 040449 (don’t need for login)
Completing the Return: Interview
 Review
intake form, introductory chat
 Size up the bigger issues
– filing status and dependents
– types of income
– possible credits
 Start
TaxWise interview, enter info
 Keep in mind what is being asked and why
 If any intermediate issues, refer to expert
Completing the Return: Forms








USE ALL CAPS NO PUNCTUATION
Check for red anywhere, CTRL + space
Do federal and state unless reason not to
Be very careful with SSNs and addresses
Encourage e-file, but paper if taxpayer prefers
Check or direct deposit; voucher or e-withdrawal
Utilize 4012, Pub 17, irs.gov, and site expert
See Taxwise flow chart p. 40
Completing the Return: Review
Diagnostic check
 Every return must be quality reviewed, w/sheet
 E-file whenever possible

– you will not e-file yourself, just mark “ready for e-file”
– if paper filing, indicate in return status
Print 2 copies, 1 for taxpayer, 1 for us
 Taxpayer signature, form 8879
 Attach intake, 1040, W2, 1099-R, etc.

Certification

For tax lessons/reference info:
http://www.irs.gov/app/vita/index.jsp

For the test:
http://linklearn.webtechteam.com/login.aspx?ReturnUrl=
/default.aspx

Basic level only (unless you want to do intermediate)

80% right, 2 tries, question types rotate

Use 4012, Pub 17, and TaxWise!

When you are done, email the pdf to
agreaves@law.harvard.edu and you will be scheduled